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The current status of JNR's management has been brought to a disastrous
condition To cope with this condition, in December, 1975, the Japanese Government
obtained approval of the cabinet on the "Japanese National Railways Reconstruction
Plan", and reconstruction was begun. Later, however, this plan had to be partially
revised due to various situations such as a significant delay in the effective
date of the fiscal 1976 transport fare revision. Then in January, 1977, the
Cabinet revised the former plan by approving a proposal entitled "Concerning
the JNR Reconstruction Plan", which postponed the target year roughly toward
fiscal 1979. In fiscal 1976, the Japanese Government took a series of measures
to implement the plan such as the shelving of liabilities, a reduction in the
burden of construction works expenditures, and the partial subsidizing of the
expenses for operation of local lines. In fiscal 1977, two other subsidy measures
were taken by the Government: a subsidy for preparation and operation of large
city traffic facilities and a subsidy for operation of local bus lines, totaling
\445.7 billion in subsidies (up \86.9 billion over the previous year). Further,
a "bill proposing a partial revision of the Japanese National Railways Fare
Act and the Japanese National Railways Act" was submitted to the 80th Diet Session.
This bill proposed the establishment of a system by which JNR could decide on
its own fare increases within certain limits set by the Diet and with the approval
of the Minister for Transport. As of November 15, the bill was still being deliberated
by the 82nd Diet Session.
Further, the Japanese National Railways Act was revised in November, 1976
based on the thinking that the reconstruction could only be achieved by the
JNR thorough reinstitution of sound management practices. As a result, it was
decided that JNR would map out and carry out by itself the reconstruction management
plan. Based on this revision, JNR completed in April, 1977,a management recovery
plan which consists of measures in an extensive range of activities such as
the recovery of passenger and freight transport operation, recovery of local
line operation, increase in efficiency of business operation, securing of related
business revenues and the modernization of management control.
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